The "American Dream" upon which Obama routinely waxes-bullshit (McCain is just bad on this front, in fairness) is not - contrary to what he and many of his supporters think - that everyone has the god-given right to be financially well-off.
Before the Obama freaks inevitably jump down my throat, let me state this as clearly as possible.
Warning:
This is a non-partisan post. I do not support Obama or McCain. Let me repeat: I am completely Party and Candidate-neutral in this election. This is an examination of concepts central to this election, and the philosophies behind them. This post is not intended to be, and in no-way represents an endorsement or criticism of any Candidate beyond the issues discussed. In the next few weeks, we'll likely be posting new material lambasting both McCain and Obama, so please don't be so quick to judge.
Now that we've gotten that out of the way (although I expect the attempt will inevitably be in vain), the WSJ describes the differences between Obama and McCain's "value-based" tax plan:
Sen. Obama replied that it's a matter of values. His plan values work, not just wealth, he said. And after largely dodging Joe the Plumber, Sen. Obama referred to him on Saturday as one of the working people who would receive a tax cut under his plan.
"It's time to give a tax cut to the teachers and janitors who work in our schools; to the cops and firefighters who keep us safe; to the waitress working double shifts, the nurses in the ER," he said. "And yes, the plumbers, fighting for the American dream."
I want to focus on one clause in that statement for a moment, "His plan values work, not just wealth." Let that sink in for a second. Obama tacitly acknowledges that work is valuable. However, based off the subsequent paragraph, above, he fails to make the connection that not all work has the same value, which in capitalistic society is commonly measured by the price paid for that work. (ed: A deeper discussion of the price paid for work being an accurate measure of the value society attributes said work is beyond the scope of this discussion, for another time though for sure, 1-2 care to give it a shot?) My job, for example, is not nearly as valuable or more accurately, not priced as highly as that of a surgeon, an all-star trader, a talented architect, etc, all of whom likely make several times what I do (just take my word for it).
When you break it down, the value of any work, like the value of most things, is a function of supply and demand, itself naturally influenced by several other factors (education/skill/experience required, barriers to entry, perceived value to the employer, risk factors, etc). There are lots of people who want to, and are qualified to be a waiter/waitress relative to the demand for such work. There are far fewer individuals who want to, and are qualified to be a surgeon, relative to the demand for that type of work. This is why the waitress does not make as much money as the surgeon.
One does not need an advanced degree to understand this very simple concept. However, Obama blatantly acknowledges that his system simply "values work," completely subverting the "market-based" valuation of said work. Generally speaking, the "market-based" system rewards increased education, experience, and knowledge. It encourages people to not only work hard, but to work smart. Similarly, it encourages ambition and dedication, generally providing greater (financial) rewards the higher up on the career path one climbs. It is worth mentioning though, and is often ignored in political discussions, that with increased income, more often than not comes increased stress, hours, and responsibility. For some people, sometimes, in some situations, the trade-off makes sense, for others, it doesn't. Essentially, we must acknowledge the fact that making money, at whatever cost, is NOT everyone's goal. This is an important distinction which is notably absent from virtually any rhetoric I've heard from either candidate, and most clearly ignored in Mr. Obama's redistributionist policies.
While we absolutely agree that people have other many other motivations for choosing a particular form of work, it absolutely cannot be denied that money is a significant factor, sometimes the primary one. Any non-deluded person in Law, Finance, Medicine, Politics or a almost any other field will tell you that if it weren't for the money (or the future expectation thereof), they likely wouldn't be doing what they're doing (or working up to where they are).
Just because you live in America does not mean that you are entitled to owning a house, a car or an iPod. You are not guaranteed to be able to take a vacation to Disneyland, to be able to pay for the "best" private schools and Universities or anything that is not explicitly guaranteed in the Constitution, among various other documents of course. (For what its worth, I'd like to see both reform and improvement in healthcare and education, both of which are, and should be guaranteed, but that's a conversation for another time, lest you think I'm some right-wing elitist jackass, which I"m not, but I digress...)
Newt Gingrich probably put it best:
"The Declaration of Independence says we are endowed by our Creator with certain inalienable rights, among with are life, liberty, and the pursuit of happiness. Notice, unlike the welfare state it doesn't guarantee happiness, it doesn't offer happiness stamps, it doesn't suggest the government should pay therapy for those who have not yet found happiness."
Everyone in this country, whether they realize it or not, has the opportunity to be well-off, financially or otherwise. Do some people have upbringings which afford them advantages not given others? Absolutely. Is it likely far more difficult for the average kid from the ghetto or born into a rough familial situation to attain such success? Surely. Addressing this issue though is, again, an important conversation for another time.
Sometimes life just plain ol' isn't fair though. Everyone has to deal with this unavoidable fact at one point or another, to varying degrees and under varying circumstances. These are the things that we cannot control, coming down with a rare genetic cancer, for example.
The important fact that we must remember though, a fact that is painfully absent in the minds of so many Americans, is that there are many things we CAN control.
The kid born to the impoverished, out of work laborer parents isn't relegated to the same destiny. He or she can, through a combination of working harder and smarter, become almost anything he or she wants to be. Not everyone has the natural talent (etc) to do certain things, like play in the NBA or perform at the Metropolitan Opera, but remember, we're talking about things we can control. This is economic and social mobility.
This, my friends, is the American Dream.
Despite the nonsense populist pandering of various Politicians (Mr. Obama is a worse offender than Mr. McCain on this front), we must remember that the majority of us largely have the power to control our own destinies in this respect. This requires us to abandon the denial and sense of entitlement Politicians like Obama reinforce with their rhetoric and policies.
This requires us to remember that our decisions and our actions have consequences for which we must accept responsibility.
When it comes down to it, ceteris paribus and broadly generalizing, we all chose our careers, which for most of us, means we chose our incomes. The waitress who likely never went to college and makes $30,000/year made a series of choices to get there , just like the Wall Street analyst who makes $300,000 likely worked his ass off to get into a good college and top Business School did.
Are there exceptions? Of course! But remember, we're talking about things over which we have control Lets imagine that maybe our waitress got pregnant and needed a flexible job to feed her starving baby, but remember, you don't get pregnant by accident (barring rape, of course). In this example, a bad decision - perhaps it was getting drunk and not using a condom during intercourse, lets say - is still a decision; it was not outside our lovely waitress' control. Good for the waitress that she is accepting the consequence of her actions - getting a job to support her baby - and not lining up for a suckle at the government teet for a handout because of her own poor decisions.
Unfortunately, Mr. Obama would take money (via tax hikes) from people who made decisions which resulted in their financial well-being and redistribute it to those whose decisions resulted in a lower level of financial success. This reeks of socialism, and I challenge anyone to explain how it isn't with a clear, level-headed response.
Those with even a fleeting familiarity with political philosophy must invariably be likewise familiar with the work of Locke and Rousseau, and the ideas of Property and the Social Contract. (I'm skeptical whether either Presidential Candidate fits into this category, but I digress...) I think you'd be hard pressed to find any reasonably sane person who doesn't believe that we should be concerned with the greater good, for example, to make sure that we try to take care of those who cannot care for themselves.
What Obama does not seem to want to acknowledge (with his redistributionist policies) though is that the social contract is not asymmetrical. That is, in agreeing to be bound by it (and to benefit from it), each person tacitly agrees to adhere to it.
Thus, it is not the obligation of those who adhere to the Contract- those who played the game and achieved financial "success" (arbitrarily defined by Obama at $200 or $250k/year) because of it - to be forced to subsidize the lives of those who haven't.
I am not so naive to presume though - as some critics of these policies have argued - that increasing taxes on the rich will cause a massive shift in high-paying jobs offshore, a trend which will trickle-down and result in further job erosion across the board. Will it happen? Perhaps some, but in Obama's defense (see, I really meant non-partisan!), most certainly not to the vast degree which many of his critics claim.
Much to our severe disappointment, both Obama and McCain have consistently demonstrated that their understanding of basic economics (to say nothing of their lack of knowledge of any other related subjects) rivals that of a 5th grader. Maybe.
Naturally you have to discount any political rhetoric leading into an election by somewhere around 50% (+/-), all the more when such rhetoric relates to such broad, sweeping changes like those advocated by Obama. McCain isn't much, if any better here, but realistically I don't expect that if elected, he would be anything close to the "Maverick" he would have us believe he is. Any changes he actually delivered on are likely to be more incremental and far less distuptive than the ones proposed by his opponent. We are not saying that fact leads us to think McCain would necessarily make the better President than Obama; there are many areas in which we need to see significant and sweeping change. However, it is worth nothing that - especially given our current economic predicament - implementing such massive and far-reaching policies like the ones Obama has presented might not be the best idea.
Despite discounting his populist rhetoric, given the Democratic Congres (and other factors), I fear that if elected, Obama just might actually deliver on his redistributionist promises, and it scares the living crap out of me for the reasons I've discussed above.
The U.S. Government is a large, complicated beast, one that Obama wants to make even moreso on both fronts. This is very seldom the best way to go about fixing anything, especially Government, especially in a massive economic downturn (recession, whatever). The "system" is not necessarily broken as Obama would have you believe. Quite the contrary. It was broken, and now we need to rebuild it (better...faster...stronger...wah wah wah wah wah).
Mr. Obama's vision of the American Dream, and the ass-kissing rhetoric with which he presents it are very similar, almost a carbon copy of the political mentality that had no small part in our current economic woes. While it may not be politically convenient, now, more than ever, we need to take this opportunity to remind the Public that we aren't entitled to the things to which we have grown accustomed. It might not be what we want to hear, but it is an unassailable truth which we need to accept sooner, rather than later, lest we learn our lesson the hard(er) way at some point down the road.
Unfortunately, Mr. Obama seems intent on doing the opposite, of fueling the entitlement mentality that has lead us to years worth of negative savings rates, of record debt at virtually ever level, and fueled the mortgage and real estate boom/bust from which we're trying to recover. He can point to greed on Wall Street as the cause of all our problems, but the reality of the situation is that greed on Main Street was just as much to blame.
Rewarding, nay, encouraging such behavior - regardless of what Street it takes place on - is no way to fix anything.
nice
Posted by: 909 | October 20, 2008 at 06:14 PM
I couldn't agree with you more. Wealth redistribution is state sponsored theft. Check out Frederic Bastiat's The Law.
I firmly believe that without a government safety net, person to person charity will see a resurgence.
Posted by: Guest | October 20, 2008 at 06:41 PM
This is an excellent post, and a thoughtful argument against Obama's populist socialist policies.
Now, realistically speaking, you are virtually shouting in the wind. In fact, in a gale force storm.
This is not a time for reasoned issue-driven debate, the campaign is run like a high school cheerleading contest. Populist rhetoric reigns supreme. People just want to punish Republicans for failing to represent their most basic principles (smal, principled governance). Most people don't put nearly enough thought into their voting decision, and treat it more like an America Has Talent show.
Posted by: reader | October 20, 2008 at 08:39 PM
Anal_st - While I couldn't agree more with your belief that the sense of entitlement in the US needs to go, I think this a rare occasion where I disagree with your premise.
The entire tax system in the US is based on redistribution - that's why we have marginal rates. Obama is simply verbalizing how the system works and advocating some (fairly minor) adjustments. Also, your comparison of the $300K analyst and the $30K waitress ignores the fact that the analyst still has a significantly higher net income than the waitress, probably in the range of 5-6X. So the incentives remain.
Plus,what I've heard about Obama's plan would be to raise the marginal rate above $250K from 36% to 39%. For your $300K analyst, that means an extra $1,500 in taxes a year. That will hardly be a disincentive to future analysts.
Posted by: Thoth | October 20, 2008 at 08:58 PM
@ 909, guest, etc -
Thanks, glad you enjoyed.
@reader
Couldn't agree with you more - the Presidential election is spectacle and mostly-empty BS rhetoric(and forgive me if I steal borrow that allusion, fantastic, ha!).
@ Thoth
You make a very good point which I should have been more clear about. However, there is a reason why you'll notice that not once in the post did I mention the argument that increasing marginal tax rates (which for most won't be nearly as substantial as some fear) will remove incentives to achieve financial success. Somewhere up there though, I did point out that because of the relatively small (key word: relatively) marginal increase for many I doubt there will be much, if any real job attrition to other locales, which indirectly agrees with your sentiment that the incentives technically still remain.
What I wanted to highlight is the principle(s) of the matter, I guess you could say. Quite on purpose, I avoided several issues (namely the ones which I explicitly stated were beyond the scope of this article), or going down certain roads which would detract from the basic point of this post.
Just for shits & giggles though, consider this: Obama's plan is, as far as I can tell, age-agnostic. That is, ceteris paribus, a single 20-something making $60k per year would receive the same (or very similar) benefits as a single 40 or 50-year old earning the same amount, according to the tax savings calculator on Obama's website.
Lastly, I want to reiterate a promise I was very obvious about making throughout the post: We are not singling out Obama. Don't worry, McCain has just as many flaws, and will (eventually) get what's coming to him, too.
Posted by: Anal_yst | October 20, 2008 at 09:54 PM
Thank you for the very thoughtful and measured post. I couldn't agree with you any more and I would never be able to put it in as measured a form because some powerful emotions overtake trying to apply an even hand.
I am currently a lower-mid level employee in the most hated industry and I supposedly suck on the poor folks' blood. However, I come from a really destitute background with my own father having gone without food at times for want of money. Today I am where I am and I have become an automatic object of hatred for the masses.
Yet, no one will look back an see how my parents spent almost all their income on my education, while their peers in their socio-economic strata spent on a new tv or a new bbq grill. Today, they will say that everything is unfair and I need to pay my 'fair share.' But why should I pay any more than those who came from the same socio-economic background as I did? Because they never put in their 'fair share'?
Calls for higher marginal rates by the rich mavens of the liberal party makes my blood boil. If they really cared about equality, they would not tax income - they would tax wealth. Today Warren Buffet or George Soros can pay 95% marginal tax without it it impacting their lifetstyle even one tiny bit. However, a high marginal tax rate will simple freeze the society into its current economic stratas - with those with the wealth maintaining it and those without it never being able to acquire it.
I think that is what they want. The Kennedy's and their clan obviously dont like riff-raff vying with them for the goods. The biggest wonder of the growth of the 'wealthy' folks over the past couple of decades or so is that most of them are self made people, that is - none of them were born with the wealth. They created it. This is in direct defiance of all of human history where those born with the means maintained their control over the assets.
If anything, people should probably appreciate this miracle of the American system where 2 smart guys who come up with a brillian search engine get to become billionaires many time over. Instead, we curse the system.
Sorry if this came off as a rant. I havent slept for 36 hours because of work. Of course, Obama does not care much about that. However, his heart absolutely bleeds for the worthless hipster who spent his weekend smoking pot, getting piss drunk and pretty much doing nothing of any use. As a future welfare recipient - he is of course the apple of Obama's eye while the evil villanous me probably should work more so that I can pay my 'fair share' in supporting that hipster, failing which I will probably be shipped off to some camp.
Posted by: Matt | October 21, 2008 at 01:33 AM
Why not pursue a flat tax? Or would that be too fair and equitable?
I'm in favor of neither candidate; however, in this election I find myself having to cutoff my nose to spite my face. Not a position I like to find myself in, especially given the recent economic meltdown we are in the midst of.
Anal_yst given your thoughts on the redistribution of wealth and taxes, I am genuinely curious to know your thoughts on the current government bailout. Is this not considered a redistribution of wealth at the corporate level, where only a select few partake in the proverbial pot of gold?
I grudgingly admit that we are in a position where the markets require government intervention, but for the life of me it appears the Movers have finally left for Galt's Gulch. Hopefully I'm wrong, and the economic destruction currently taking place will merely be the fire for the phoenix of capitalism to rise again. There's always a regression to the mean, right? But what is that mean....?
Posted by: David | October 21, 2008 at 02:11 AM
Anal_yst - Don't worry, I didn't think you were singling out Obama too much. I just wanted to point out that Obama was the one brave enough to call the system what it is. Like it or not, our system is based on redistribution. If anybody really wanted to do away with that concept, then why aren't they supporting the flat tax, like David suggests above (though I think you can argue that a marginal rate system is equitable, but not equal)?
I suspect the reality is that, because of the structure of income in the US, you'd need to have the flat tax set too high (maybe around 33%), so while you probably wouldn't get the tax reduction that Republicans want, the lower-income folks will have to pay more and the Democrats wouldn't like that. It becomes bad politics all around.
Posted by: thoth | October 21, 2008 at 08:29 AM
The New Deal says hi. You imbecile.
Posted by: Sensible Person | October 21, 2008 at 08:52 AM
unfortunately, it's impossible to campaign on a platform of Social Darwinism. You hit it in the beginning: we have the right to the PURSUIT of happiness, not the right to hapiness...
and this is what all the politicians need to understand :we have the right to the PURSUIT of homeownership (although that's not explicitly stated) - we do NOT have the right to homeownership. there are tens of thousands, maybe hundreds of thousands of Americans who were erroneously given the opportunity to own homes they could not afford. the key flaw in most of the discussions about what to do now fiscally is that everyone is focusing on how to save these people's homes!!! NO! by maintaining inflated home prices that were never affordable, we just postpone the crashing of the house of cards (in addition to providing significant positive reinforcement to the poor decision making you discuss). these people need to return to their prior housing situations - they should not be subsidized in homes they cannot afford.
Posted by: Kid Dynamite | October 21, 2008 at 11:47 AM
"[T]he reality of the situation is that greed on Main Street was just as much to blame."
True. We just witnessed a SYSTEMIC failure... bailed out by massive wealth redistribution. Anal, your pure and earnest discussion of basic economic truths is spot on. I'm just not sure it matters anymore. Human biases and omnipresent moral hazard, not to mention regulatory distortions, condemn markets to inefficiency.
Whether one "believes" in markets or not is irrelevant as we live in a (mostly? usually?) capitalist world. So I am not going to preface this comment by saying I am a fan of competitive markets - anyone who accepts cash in exchange for providing service or goods is. Free market economics is unexciting to me now as a Philosophy simply because it doesn't reflect reality. It's a theory. In practice, because of apparently unavoidable distortions and human error, markets become inefficient and must be bailed out/socialized or our economy dies. Is that not what just happened?
And, yeah, as has been mentioned above, Obama is saying things he thinks will get him elected. Just like Goolsbee said in Canada, Obama is not going to do anything too crazy if he is elected.
Posted by: Billy Ray Human | October 21, 2008 at 12:38 PM
@ Matt
Glad to see you pulled yourself up (with love and help from your determined parents it sounds) from your bootstraps. That should be commended, not denegrated, regardless of your chosen profession.
@David
I purposely didn't address the foil between the "Bailout" (or whatever its called now) and Obama's proposed policies. This post ran somewhere around 2,500 words. If I were to give all the related discussions their due, it would be at least 10x that, more than I was willing to write at the time and far more than most people would be willing to read.
@ "Sensible Human"
Huh? Care to enlighten the rest of us?
@ Dynamite
Great points (as always), unfortunately as we've discussed the voice of reason is not nearly the loudest one here. To address the specific point of 'keeping people in "their" homes', its very similar to drugs. If never promises that they could own (er, "own") their homes, many people would likely have gone on content, however, once they've had a taste, its nearly impossible to give it up. Many people now feel entitled to home ownership (and financial comfort) because someone told them they deserved it.
Admittedly, there is a similar (although not as prevalent, despite what some liberals might claim) entitlement mentality in Corporate America, and on Wall Street as well. The days of crazy profits due to immense leverage are, for the most part, behind us, as are the attendent bonuses they afforded.
Naturally, there will eventually be the next 'big thing' and the cycle will unfortunately repeat itself no doubt, but until then, we're running alot leaner than many have grown accustomed.
@ Billy Ray
With a Dem president and congress I'm less-and-less sure that'd be the case, although I'm sure at least 50% of the talk will never come remotely close to fruition.
Imagine, then, the dissapointment from all of the Obama crazies whose vote he won with promises of CHANGE CHANGE CHANGE, only to fail to deliver on most of it...
Posted by: Anal_yst | October 21, 2008 at 01:22 PM
How about a consumption tax completely replacing any kind of income tax, with waivers (or reduced tax) for necessities (anything you can buy with foodstamps) and *maybe* higher rates for certain "luxury" goods?
Also, I'm sure you've probably seen this, but I think it's funny/worth reading again. Why the "tax the rich guy and give it to the poor guy" is a bad idea:
Suppose that every day, ten men go out for dinner. The bill for all ten comes to $100.
If they paid their bill the way we pay our taxes, it would go something like this:
* The first four men (the poorest) would pay nothing.
* The fifth would pay $1.
* The sixth would pay $3.
* The seventh $7.
* The eighth $12.
* The ninth $18.
* The tenth man (the richest) would pay $59.
So, that's what they decided to do. The ten men ate dinner in the restaurant every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve.
"Since you are all such good customers," he said, "I'm going to reduce the cost of your daily meal by $20."
So, now dinner for the ten only cost $80. The group still wanted to pay their bill the way we pay our taxes.
So, the first four men were unaffected. They would still eat for free. But what about the other six, the paying customers? How could they divvy up the $20 windfall so that everyone would get his 'fair share'?
The six men realized that $20 divided by six is $3.33. But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being 'PAID' to eat their meal.
So, the restaurant owner suggested that it would be fair to reduce
each man's bill by roughly the same amount, and he proceeded to work
out the amounts each should pay.
And so:
* The fifth man, like the first four, now paid nothing (100% savings).
* The sixth now paid $2 instead of $3 (33% savings).
* The seventh now paid $5 instead of $7 (28% savings).
* The eighth now paid $9 instead of $12 (25% savings).
* The ninth now paid $14 instead of $18 (22% savings).
* The tenth now paid $49 instead of $59 (16% savings).
Each of the six was better off than before. And the first four continued to eat for free. But once outside the restaurant, the men began to compare their savings. "I only got a dollar out of the $20," declared the sixth man. He pointed to the tenth man "but he got $10!"
"Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than me!"
"That's true!!" shouted the seventh man. "Why should he get $10 back when I got only $2? The wealthy get all the breaks!"
"Wait a minute," yelled the first four men in unison. "We didn't get anything at all.. The system exploits the poor!"
The nine men surrounded the tenth and beat him up.
The next night the tenth man didn't show up for dinner, so the nine sat down and ate without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!
Posted by: Ed | October 21, 2008 at 06:20 PM
this NY Times feature article put me into a deep depression:
http://www.nytimes.com/2008/10/22/business/22target.html
just reading the tone of the article, and the accompanying comments... people give no thought to the fact that maybe the credit card companies are not the ones to blame... the people who can't pay the credit card debt ARE...
Posted by: Kid Dynamite | October 22, 2008 at 10:48 PM
@ ED
funny, saw that from about 10 different people/places this week, of course the Obama fans will no doubt attack that in any number of fronts, the "smarter" ones the idea of capital mobility (the rich guy being able to/actually just up and moving).
@ Dynamite
HERESY! It's not the debtor's fault they needed to use their credit cards and the issuers kept increasing their credit limit, nooo! How dare you?!?!
Posted by: Anal_yst | October 22, 2008 at 11:17 PM
Unfortunately sir I am going to have to disagree with you to an extent. I, by no means, am a socialist or anything of the sort, but I think to an extent the redistribution of wealth is a necessary evil that we all have to deal with, even for the good of the wealthy. The reason I say this is that many/most great empires in history have seen civil war, and some, their undoing because of the unequal distribution of wealth. It creates class warfare that pits many non-wealthy against a few wealthy, which eventually ends up poorly for the wealthy. I'd say a strong middle class is something that is in everyone's best interests, and we have been losing it slowly of the past decade.
In theory I hate the fact that I am sitting here at work while someone else is chilling at home eating 'their' McDonalds and watching 'their' TV, which they have because I am paying my taxes and our gov't is writing them a check with it.
Now in fairness to Obama, he is recommending that we raise the income tax on the top bracket. He is not proposing this distribution of wealth idea, we already have it built into our system, he just wants to do it a little bit more. Perhaps this is not fair, but something that is fair is taxing hedge fund and PE managers a full earned income tax. I think it's ridiculous that these guys pay a lower percent of their income than I do...do I think they should pay more than me??....probably not, but they should pay as much at least.
Bloomberg / Romney '12
Posted by: Ass_ociate | October 23, 2008 at 04:40 PM
Unfortunately sir I am going to have to disagree with you to an extent. I, by no means, am a socialist or anything of the sort, but I think to an extent the redistribution of wealth is a necessary evil that we all have to deal with, even for the good of the wealthy. The reason I say this is that many/most great empires in history have seen civil war, and some, their undoing because of the unequal distribution of wealth. It creates class warfare that pits many non-wealthy against a few wealthy, which eventually ends up poorly for the wealthy. I'd say a strong middle class is something that is in everyone's best interests, and we have been losing it slowly of the past decade.
In theory I hate the fact that I am sitting here at work while someone else is chilling at home eating 'their' McDonalds and watching 'their' TV, which they have because I am paying my taxes and our gov't is writing them a check with it.
Now in fairness to Obama, he is recommending that we raise the income tax on the top bracket. He is not proposing this distribution of wealth idea, we already have it built into our system, he just wants to do it a little bit more. Perhaps this is not fair, but something that is fair is taxing hedge fund and PE managers a full earned income tax. I think it's ridiculous that these guys pay a lower percent of their income than I do...do I think they should pay more than me??....probably not, but they should pay as much at least.
Bloomberg / Romney '12
Posted by: Ass_ociate | October 23, 2008 at 04:41 PM
I see your point, it's a fear of mine too about Obama; Socialism that will cripple our GDP and American way.
BUT at the same time: There are possibly thousands of jobs where the pay and income structure has an inequality relative to its value. (Take nursing for instance).
The Tax hike is very simple, our government needs money, and the inequality between rich and poor has never been greater (ie. the value system is not working according to the basic supply/demand economic theory.) So TAX the richer parties and set it arbitarily at 250k...
In any event, we are in trouble no matter what they do. Good bye ridiculous bonuses for using others' monies. I think I'll start looking at setting up an African Hedge Fund, who's' with me?
Posted by: morgan | November 06, 2008 at 05:35 PM
Has everyone forgotten that we are already effectively socialist? Social Security for the baby boomers is going to criple us anyway. Redistribution from the young and working to the old and useless has been going on for decades. I am not making a judgement as to whether or not this is right or wrong in this statement; I am just stating that this is an extension of a policy already in place.
As someone who lives in the third world, I would argue that this small increase in our taxes (from 36 to 39 percent) is fair price versus the stability we get for it. The police essentially function to protect the rich from the poor, and without some stream of cash to sustain them, the utterly destitute poor will defeat the police and take all the stuff rich people have worked for. Think about that New Yorkers the next time you want lower taxes but no handguns. This money we pay is essentially put protection against our "skip to zero risk". As our wealth goes up, we have more to lose and should be willing to pay a higher amount of notional to protect that. As the gap between rich and poor has widened, we have to pay more because we have more to lose.
Posted by: alex | November 17, 2008 at 03:44 AM